Lundin Mining Invests $350M To Expand Caserones Stake, Enhance Copper Production

Lundin Mining LUNMF announced a $350 million investment to boost its ownership in the Caserones copper-molybdenum mine in Chile to 70%. After acquiring control of the mine in March 2023, the Canadian miner is now exercising a right to expand its stake, boosting its copper and rare metal output.

“This strategic investment reinforces our commitment to expanding our copper portfolio and strengthens our presence in a key mining region,” stated CEO Jack Lundin.

Caserones is situated in the Atacama Region of northern Chile, near the border with Argentina, and operates at an altitude of approximately 4,200 meters. The mine produces both copper concentrate and copper cathodes alongside molybdenum concentrate. Anticipated production in 2024 stands between 100,000 and 130,000 metric tons of copper and around 3,000 metric tons of molybdenum.

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The mine’s strategic location and substantial production capacity make it a valuable asset in Lundin Mining’s portfolio. As part of the investment agreement, Lundin Mining will now be entitled to a yearly operator fee in the form of a $21 million preferred dividend, which will increase to $28 million in 2025.

Management plans to fund this transaction through its revolving credit facility, ensuring the investment does not impact the company's immediate liquidity.

Expanding a stake in a copper mine is no surprise to the industry, as BHP's recent $50 billion attempted acquisition of Anglo American showcases the importance of quality copper assets.

Speaking at this week’s London Indaba, Benchmark Mineral Intelligence analyst Piotr Ortonowski commented on the positive trend and growing demand for copper as a pivotal metal in the global energy transition.

"I think we’re moving into a new era of demand where we might see, instead of 2% to 2.5% growth per annum copper demand, we’ll probably see 2.5% to 3% demand growth, which might not sound like a lot, but it is, in absolute terms," he said, per Mining Weekly's report.

Lundin Mining’s increased stake in Caserones positions them well to capitalize on this upward trend.

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